If you’ve made the decision to invest in property, you might think the next step is the easiest one: picking a house to purchase. But it’s not as simple as perusing the real estate section on a Saturday morning. If you’re new to the property game, how do you know what to look for before you buy? In this article, we’ll tell you the factors you need to think about while you hunt for the perfect dwelling.
Contrary to what people think, the actual property itself is the last thing you should be thinking about. Start by looking at the big picture. What’s your spending level? What can you afford? Calculate this by looking at your income and assets, and use that result to narrow your focus down. There’s no point property-shopping without a clear idea of how much you can afford.
Next, look at the location. Which location in the country is performing best for what you can afford? Which location is likely to be the highest growth in what you can afford? Look for the areas with the highest potential growth rate, because you don’t want to be somewhere that has already experienced high growth as the horse has probably bolted. It’s future growth rate we’re thinking about. Check out this article which will help you to figure out which purchase price you can afford + location hot spots.
Escape to the Suburbs
Once you’ve decided on your spending limits and preferred location, the next step is the suburb. The most desirable suburbs are those that have the highest level of future change, and this change is driven by committed change/infrastructure, such as new roads, new shopping centres, and new schools. Also look for areas that fall within popular school catchment zones as families will move into an area just to get their kids into the best schools. You also need to take into consideration the income of people living in that area. Look for areas where the residents have strong and growing incomes that can afford to pay increasing prices to sustain property price growth over the long term.
Now for the fun part: the property itself. Think of your property as a sanctuary, and choose with that in mind. The Great Australian Dream is one of a detached house and backyard with 3-4 bedrooms, 2 bathrooms and a double garage, and that is the sweet spot in which you should be aiming for. If your investment property has been designed to replace your income, you should choose a house that the ordinary Australian will feel at home in. While it might be tempting to buy an expensive, exotic property with the idea that it will produce a higher result, that won’t often be the case. Expensive houses are not in high demand, simply because the majority of Australians are unable to afford it.
Factors such as an outlook onto a park, a big alfresco area and larger bedroom layouts on an appealing street are property aspects people take into consideration when looking to buy, and you should do the same when looking to invest. Classic, undated houses always fare better in the market. No matter what the current trends are, they will eventually look dated and aged, making them seem undesirable in comparison to others. Your investment property should be like an art gallery: a blank canvas where the tenants can project their own lives onto, while allowing you to live the life of your dreams.